Quantum Computing for Risk Analysis in Finance and Insurance

These dynamics will unfold alongside technical milestones with qubit stability and quantum error correction serving as key indicators of the technology’s readiness for mainstream adoption. For business leaders, understanding these trends and milestones is not just advantageous, it is imperative. Alan Key, a distinguished computer scientist, once characterized the difference between natural sciences and computer science in the following way.

The quantum computers available today are small, noisy prototypes, but the field is progressing rapidly. Quantum computers may soon become a critical part of the computing landscape as we move beyond cutting-edge Exascale computers. Quantum computers are computers that consist of quantum bits, or “qubits,” that play a similar role to the bits in today’s digital computers. The laws of quantum mechanics allow qubits to encode exponentially more information than bits. By manipulating information stored in these qubits, scientists can quickly produce high-quality solutions to difficult problems. This means Quantum computing may revolutionize our ability to solve problems that are hard to address with even the largest supercomputers.

If a military force possesses quantum computing capabilities while its opponent does not, the information imbalance may leave the latter unable to protect its assets and vulnerable to strategic disadvantages. One of the most notable advancements brought about by quantum computing is its ability to transform cybersecurity and data encryption. Today, data security heavily relies on encryption keys for secure transmission. However, hackers can replicate these keys, thus gaining unauthorized access to sensitive information. By employing the principles of probability theory, quantum machines make processed information inherently immune to duplication or replication.

QC — Cracking RSA with Shor’s Algorithm

Atom Computing’s initial 100-qubit Phoenix machine and its next-generation 1,225-qubit platform are important milestones in its roadmap to build a fault-tolerant gate-based machine. So far, the company continues to hit its goal of scaling qubits by an order of magnitude in each generation. In addition to funding, the DARPA partnership provided Atom Computing with access to experts from the Defense Department, academia and national labs. Given that the company’s previous computer was roughly 5 feet (1.5 meters) across, shifting to 19-inch-wide (48.3-centimeter-wide) server cabinets required a significant redesign, says Chapman. In particular, the optical components at the heart of its device had to shrink considerably.

The result is that a series of qubits can represent different things simultaneously. We built Qiskit Runtime for the era of useful quantum computing, allowing you to easily create powerful algorithms and run them at scale. Qiskit Runtime delivers a tremendous performance increase for non-trivial workloads, resulting in some cases in a 120x speedup over previous methods. First-of-their-kind quantum primitives and middleware enhance its capabilities as we work toward realizing quantum advantage.

The devices will be plug and play for any data center

First of all, if we have a quantum computer, it will be useful for scientists for conducting virtual experiments. Quantum computing started with Feynman’s observation that quantum systems are hard to model on a conventional computer. (This is known as “quantum simulation.”) For example, we could model the behavior of atoms and particles at unusual conditions (for example, very high energies that can be only created in the Large Hadron Collider) without actually creating those unusual conditions. Or we could model chemical reactions—because interactions among atoms in a chemical reaction is a quantum process. However, only if the older systems remain old and are not replaced by new encryption methods.

Indeed, the level of complexity and stability required of a quantum computer to launch the much-discussed RSA attack is  extreme. Even granting that timelines in quantum computing — particularly in terms of scalability — are points of contention. It should be stressed that quantum computers haven’t yet hit that level of maturity  — and won’t for some time — but if and when a large, stable device is built its unprecedented ability to factor large numbers would essentially leave the RSA cryptosystem in tatters. Thankfully, the technology is still a ways away — and the experts are on it. One QC breakthrough came in 2017, when researchers at IBM modeled beryllium hydride, the largest molecule simulated on a quantum computer to date. Another key step arrived in 2019, when IonQ researchers used quantum computing to go bigger still, by simulating a water molecule.

In the nascence of the quantum internet, however, allied states have been reluctant to collaborate on quantum research, and adversaries have not agreed on shared quantum age governance principles. In a time when governments increasingly seek to regulate the flow of information and localize data within their borders, quantum research siloes could speed up the shift toward the formation of several “mini-internets” that states control for their own interest. There are a number of strange principles in quantum physics that underpin this technology. Computer scientist Scott Aaronson investigates a new, still-theoretical generation of computers.

Also, for popular tasks such as solving optimization problems, there’s a good chance that there’s already a model that users can build upon rather than having to start from scratch. Satispay plans to put its application into production and expects its internal teams to be using the quantum computing tool on a weekly basis. These hyper-powerful devices, an emerging technology that exploits the properties of quantum mechanics, are much buzzed about. Depending on who you ask, some say that quantum computers could either break the Internet, rendering pretty much every data security protocol obsolete, or allow us to compute our way out of the climate crisis. Quantum computers can also enable faster model training, parameter optimization, and improved algorithmic performance. This can lead to advancements in fields like predictive modeling, recommendation systems, and autonomous decision-making.

Quantum computing

Researchers expect quantum computers to be particularly good at calculating properties of physical systems that are inherently quantum mechanical. These applications include molecules used as chemical catalysts, which despite their large size are subject to quantum mechanics. They also include the quarks and gluons that clump together inside the nuclei of atoms. Quantum computers may also be especially good at solving optimization problems, which involve choosing the best alternative from a huge range of options.

A universal software developer tool to program quantum applications

There’s been surprisingly little public reflection about this on the part of the quantum computing community. I occasionally meet quantum computing researchers who complain in private about what they perceive as privacy violations by governments, and the dangers of surveillance states. But then some of those same people will take money to help those governments in their plans for surveillance, usually with some transparently self-serving justification about how they’re not really helping.

DOE Explains…Quantum Computing

In fact, many organizations that are shopping for quantum computers require them to be “HPC-ready”, looking for quantum solutions that are not just powerful but also synergistic with existing HPC infrastructures. Forward-thinking companies are already experimenting with cloud-based and hybrid quantum computing, positioning themselves to capitalize on the unique and powerful innovations that quantum will unleash. Microsoft has been working on this use case together with Toyoto Tsusho and quantum computing startup Jij. The researchers have begun developing quantum-inspired algorithms in a simulated city environment, with the goal of reducing congestion. According to the experiment’s latest results, the approach could bring down traffic waiting times by up to 20%.

A few decades ago, it was shown that if you could string together qubits in the same way as you string together electronic bits, something amazing could happen. In principle you could exploit the weird “in-two-places-at-once” nature of qubits to perform certain kinds of complex computations insanely faster than a classical computer. Since the first application for quantum algorithms targeted breaking cryptographic protocols that the internet runs on, people got really interested in quantum computing really quickly. For example, to assess the risk of a portfolio you might use Value at Risk (VaR) models. Calculating VaR can become computationally intensive as the number of asset classes increases. VaR is an imperfect risk measure of risk, especially in times of changing volatility.